Tags: microsoft | ballmer | ads

Microsoft Wants Billions in Ads

Tuesday, 09 Oct 2007 09:46 PM

Microsoft CEO Steve Ballmer says the software giant will get at least 25 percent of its revenues from advertising within a few years.

Ballmer's comments came at the !MAGINE 07 trade show in Paris, and on the heels of Microsoft's purchase of online ad server aQuantive for $6 billion, and aQuantive's interactive agency unit Avenue A|Razorfish.

Ballmer has stated in the past that he would like to shift Microsoft to a "software plus services" business model, according to InternetNews.com.

Microsoft's current annual revenue is $51 billion, but only $1.2 billion of that is from advertising, and Ballmer has not issued any details about how the company plans to earn more from ads.

Some analysts believe Microsoft will make software applications like its popular Office program free, in exchange for showing on-screen ads to users.

"[Long-term] I don't think they have any choice but to have an ad-supported version of Office," Rob Enderle, principal analyst at researcher Enderle Group, told InternetNews.com. It's unclear when Microsoft might reach such a point, however.

"If they do it too quickly, they'll cannibalize one of their biggest money makers," Enderle said.

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